Nifty IT's Worst February Since 2008: $68.6B Wiped in 2026

The Nifty IT index has moved to its lowest in February 26, worst in 23 years, because of the continuing selling pressure. The sector is worried about how Artificial Intelligence will disrupt things across.

What happened across the IT segment and how deep is the impact, let us read.

Market Value Impact:

To everyone’s surprise NIFTY IT index has declined 21% so far in February 2026. Because of the dip, a total of ₹6.4 lakh crores was wiped from the market.

Source: MoneyControl

As a direct consequence of this crash, the aggregate market capitalisation of the Nifty IT Index’s 10 constituent companies fell approximately by $68.5-$68.6 billion. This dramatic loss underlines the investor’s concern and highlights the wealth wasted.

Some of the significant contributors to the decline include:

The fall wasn’t limited to one company, it was broad-based across large-cap IT names , suggesting that the investors were de-risking the sector theme. When multiple leaders fall together, it indicates a macro shift instead of execution issues with one company.

As a result of this fall, it is expected that the year 2027 will see a lot of contract cancellation as artificial intelligence tools replace humans.

Important Metrics to Understand Market 

Possible Reasons for Nifty’s IT Index Fall

Here are the factors you can read that are contributing to the sharp decline in Nifty IT Index:

1. AI Disruption Fear:

a. The emergence of advanced AI systems that are capable of executing entire workflow sparked fear of lost opportunities, implying clear reduction of staff needs.

b. The Indian IT sector runs on billable hours which looks to shrink drastically because of AI. This is because investors are wary to put their money in the basket. The IT companies initially billed for testing, coding, documentation, L1/L2 support, and analytics. But now the clients may ask for price resets during the contract/project renewal.

c. AI tools triggering panic: AI tools like Anthropic from Claude are triggering that fear in the market intensifying business model disruptions.

2. Global Tech Market Weakness

a. US Tech Sell-Off Spillover: In prior sessions, Nasdaq fell over 2% which affected the ADRs of the Indian IT firm. Like Infosys and Wipro dropped up to 9%.

b. Global Layoffs: Over 80,000 jobs cut globally in 2026, signalling structural shifts towards automation. And this fuelled investors' nervousness to another level.

c. Correlation Effect: Indian IT stock markets are highly export oriented. This is why weakness in the global tech stocks translates to domestic market pressure.

3. Sectoral Weight in the Index

Index composition effect: In the Nifty 50, the IT sector holds close to 10.8% of weight. The large caps like Infosys at 4.98% and TCS at 2.76% heavily influenced the index movement.

4. Dollar Firm

The US Dollar firmed up after stronger-than-expected January jobs data. The Dollar Index is hovering close to the 97 mark. The stronger jobs also dented expectations as near-term interest rates cut.

5. Change of Billing 

For India, the classic strength has been strength and predictable delivery, but the commercial model is still linked to effort estimation and human hours.

Conclusion

Nifty IT Index 2026 strongly reflects the technological disruption fears, valuation correction, and macro-economic pressures. Market participants must focus on contractual shifts and market AI adoptions. Post that making any decision will be worth it.

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FAQs

How much did the Nifty IT index fall in February 2026?

The Nifty IT Index dropped 21%, the worst in 23 years.

Why is this Nifty IT index drop called the worst in the last 23 years?

Big giants in the IT sector have contributed to keep the index stable. No such fall has been seen since 2008 which is why it is called the worst. The common causes are use of AI in work and change of billable work hours.

What triggered the selloff in IT stocks?

The rising fear in AI automation disrupted the IT service revenue model by shortening the project timelines and reducing the need of large teams.

Did all Nifty IT companies fall, or only a few?

All 10 index members were reported to be down in February 2026. The decline ranges from 16.8% to 27% (reported in Reuters)